michelle, it's been a pleasure. >> congrats to herb greenberg for breaking that story. >> don't congratulate him. he'll never come back on "street signs." we're kidding. michelle, it's been a pleasure. thank you all very much. "closing bell" coming up next. hi, everybody. welcome to the "closing bell." i'm maria bartiromo today coming to you live in chicago. the post-election stock slide is continuing on wall street today. another day in the red as the traders digest the president's first news conference since the election. fiscal cliff negotiations going on right now in the white house. bill, good afternoon. >> hello. i'm bill griffeth here at new york stock exchange. we have huge news making interviews coming up. stay tuned for kkr's founder george roberts, the new best buy ceo in his first television interview since taking over that troubled company, and charles

schwa b's ceo will be joining us as well. >> also, israel launches a massive military operation in response to hamas. >> gold also higher. one of those days where energy went higher and stocks went lower. we're setting lows right now. the dow down 126 points at the 12,629 level. the nasdaq and s&p are also moving lower. the nasdaq has moved into correction territory, down about 10% from its highs set earlier this year. the s&p is down sharply as well at this hour. so it was those fed minutes, the continued fears we may go over the fiscal cliff as the negotiations are being carried out so far in a very public arena right now. we are off the worst levels of the day, but will these concerns keep investors out of the market right now? let's talk about that, shall we? >> that's what we want to in today's "closing bell" exchange.

neil, let me kick this off with you. good to see you. thanks for joining us. as somebody who's putting capital to work in this market, you see a market that is down 600 points on the dow industrials. just since the election, that's 4% declines since the election on november 6th. what do you want to do here? do you want to put money in the market? >> i think you have to put money in the market but what you said is true. the market overall this year is up 7%. that's 7% in a zero interest rate environment. we all knew it was going to be a slow economy. we all knew the market was going to grow slow. the bottom line is even with the decline in the last eight days, we're still up 6.5%, 7%. >> you're saying to buy into this selloff? >> i think you have to buy into it. where are you going to put your money? most of the money is going into fixed income. that's just crazy. we know future interest rates are going to go higher.

that's not going to hurt corporations. it's not going to hurt profits, but what it is going to do is hurt the individual investor. they should be in equities. when you look at the dividend plays out there, it's crazy not to be. >> boy, when it comes to the markets, michael, you could not have a more different point of view, could you? >> we have about 30% cash. i took out another about 20%. we're about 50% today in cash. i don't think the fiscal cliff is going to happen. i think they're going to punt. i don't think anybody in washington, d.c. has the meatballs or spaghetti to care about cutting our debt and deficits. you know, the only thing that separates the two parties is the democrats supposedly wanted to raise tax rates and the republicans want to raise the effective tax rate. so what's the hysteria about? there's no -- there shouldn't be any hysteria about the fiscal cliff. look, our deficit for fiscal october, the month, one month, was $120 billion. for one month. that's 22% higher than it was

last year. that's the real fiscal cliff, not this rouge we're worried about. >> you know, we heard from the president now for the first time. it seems like the president is digging in. everybody of's digging in. it feels like a déjà vu to me. i'm hoping we get a compromise, but are we still talking about ideologies that are leading things? are we ever going to get an agreement? do we just go over it? what are the implications? >> who's that to? >> rick santelli. >> well, listen, i never was a believer that after this president won a second term he was going to be easier to work with than the first term. i'm not buying it. i perm personally think there's significant chance that december 31st will come and go and there will not be a resolution. i also believe those 2%, call it class warfare, call it what you want, they're going to see a tax increase and maybe other taxes

even though as michael said, it's not going to make any difference in the big picture of deficits. that really doesn't seem to be anybody's main issue. maybe mine, maybe michael's, maybe the average american worries about it. >> rick, even if we go over the fiscal cliff, our deficit is going to be $450 billion for 2013. that's 3% of gdp. that's all of nominal gdp growth. why is that such a big deal? >> well, exactly. the president talked about $1 trillion for the upper 2%. of course, he assumed everybody knows it's over ten years. we all know over the last three we're well over $1 trillion. >> all right, guys. you say the fiscal cliff in and of itself isn't going to matter, but why do so many ceos and financial planners say they have so many people who are holding back from making future plans, making investments in this economy because they are worried about if very issue right now? >> i'm worried about it too.

that's why i raised so much cash. at the end of the day, they're going to punt and stay drunk to avoid a hangover. that's what they have done 74 times since 1960. they've raised the debt ceiling. they've punted on austerity. austerity only comes from the free market. that's what happened in greece. when our bond market revolts and we have a failed bond market auction, that's when we'll wake up in washington, not until then. >> rick -- >> meanwhile, we have a flight to quality today. money moving into oil, moving into gold. a real developing story and a scary one coming out of the middle east. tell me how you see things, john, for oil. >> we're going to continue to go higher, maria. this looks like it's the start of something. this was the first move by the israelis. took out two senior hamas leaders. they said this is going to be a multiweek exercise. when you're talking about hamas, you're really talking about iran's proxy state, iran's proxy army. so the fingerprints are all over it. the door is going to be wide

open for a spillover even further into iran. make trouble in bahrain, make trouble in saudi arabia. it's really going to be on the rise here the next couple weeks. >> new york oil is up 86 cents. am i wrong to believe it should be up more if this is that big of a deal? >> yes, bill. we would be down but for this episode today with the rest of the markets clearly. the outlook for oil demand next year keeps gets worse and worse as the economy looks to decline globally, particularly in china and japan. the fact we're up at all in the face of a 126-point down dow speaks a lot to the nervousness of the oil market here. >> obviously, the benchmark is benton in london. how much high doer you think that could go at this point? >> we'll be on track to go back to 115, 120 on brent if this situation continues to escalate. clearly netanyahu sees an opening with the election being

over. he'll make a move to strengthen his own position for his own elections coming up. he's been looking to get it on with iran here for a while. this could be, again, just the door opener for that to happen. >> don't forget qe-4 coming in january. >> yeah, this has been a very newsy day. a lot of things we didn't get to. gentlemen, thank you for joining us. we're heading toward the close. we continue lower now, maria. still setting lows for the day with the dow down 146 points. >> we are seeing a decline of about 5% on the major averages, 4.6% since the election. don't go anywhere. we're just getting started on this business edition of the "closing bell." coming up, market indicator. maria's exclusive interview with kkr ceo george roberts. what are the ceos of his 60 companies that make up his million dollar portfolio saying about the looming fiscal cliff?

find out next. plus, righting the ship? hubert jolie joins us for his first television interview since taking the helm at best buy. how is he planning to turn around what some call a broken business model? and maria means business. honeywell ceo fresh out of his meeting with the president tells maria what went on behind closed doors. then the schwab ceo tells us about the confidence in stocks. can a deal on want fiscal cliff be just the elixir the markets need? that and a whole lot more is ahead on the "closing bell."

welcome back. less than 50 minutes in the trading session. if you're just joining us, let's get you caught up on this day with the selling intensifying. falling to fresh session lows as the president dug in his heels on taxing the top 2% income

earners in this country during his news conference. the major averages also dropped when the fed's latest minutes showed another possible round of economic stimulus coming next year whether you call it qe-4, qe-3, whatever you want to call it. the dow is down 142 points. we are very near the session lows right now. industrials, financials, materials among today's laggards. in fact, the s&p industrial index dropped to its lowest level in more than two months as part of today's trading. the nasdaq right now, maria, is in correction territory, down about 10%. >>. >> all right, bill. thank you. this afternoon, president obama held his first news conference since being re-elected. he then met with business leaders to talk about the fiscal cliff, which of course was a big topic at news conference. this question and answer was significant. listen to this. >> you said that the wealthiest must pay more. would closing loopholes instead of raising rates for them satisfy you? >> i think there are loopholes that can be closed and we should

look at how we can make the process of deductions, the filing process easier, simpler, but when it comes to the top 2%, what i'm not going to do is to extend further a tax cut for folks who don't need it. >> well, that means that the president seems to want to raise tax rates and remove deductions regardless. so what does the top man at one of the biggest and most successful private equity companies think about that? he's here to talk about it. george roberts is the cofounder and co-chief executive of kkr. so nice to have you on the program. >> thank you. >> thank you so much for joining us. what's your take on that? when you hear the president dig in and say, yes, we will close loopholes, and yes, we will close exemptions, but we still want that high tax on the highest earners. do you think we're in a situation we've been in the last four years where we're not goimg to get anything done?

>> i think we're in a situation where we have to get something done. you've got the fiscal cliff. more importantly, you have a fiscal abyss, which is what do we do going forward. >> $16 trillion in debt. >> how do we make sure that the united states continues to have a growing and vibrant economy? i think that simpson-bowles gave a good blueprint for what we need to do there where everybody shared and sacrificed what with to do. both taxes and tax rates went up. spending got reduced. so i think we're at a point now in our country we just had an election, people are aware of these problems. they expect elected officials in washington, including the president of the united states to compromise and work together to come up with a solution. >> you have to operate your business regardless of what's going on in the world. you as a businessman, how are

you dealing with this? do you need to resize the business, do something different in terms of facing the new reality where you are going to see tax rates go higher, you are going to see a heavy regulatory environment? what are you doing differently? >> well, we're growing. we're trying to expand in what we're doing. we're seeing opportunities all over the world. if you look at europe, where there's obviously a banking and currency issues, we're providing capital to the banking systems there. we're providing capital to businesses that need it. if you look at asia, there's a lot of growth opportunities in china. we're partnering with very good entrepreneurs in that part of the world. then with you look at the united states, there's wonderful opportunities in the energy field. we made quite a few investments in that the last five or six years. n then in private equity as well. this is a good time to invest in the united states.

>> what about the fiscal cliff? i mean, you've got, what, 80 or so companies in your portfolio, over $60 billion in assets. we've got a market today that is down another 150 points right now. that is on top of a nearly 5% selloff just since the election. so you say there's opportunities in the u.s. what are you hearing from your companies in terms of how they're going to adjust their business? >> well, i think, you know, that's one of the reasons that unemployment still remains high in the united states. we have uncertainty in tax policy. we have uncertainty in regulatory policies. so if you take from the first quarter of 2009 to the current date, revenue growth in the united states has been 35%. greater than it was between 1990 and 2007. >> right. >> that should have translated into 30,000 more jobs per month during this period of time.

but it hasn't because business hasn't been willing to go out and hire people, bring full-time people on board because they don't know what the laws that are going to govern them from a regulatory standpoint, and they don't know what tax policy is going to be. >> why would you add heads to the payroll when you have no clarity on what your tax rate is going to be. what fees are involved in those agencies. >> right. >> so that's the issue. so would you be poised to stay away, to get on the sidelines? are you poised to put money into this market with these declines we're seeing? >> well, you know, we're never poised to sit on the sidelines. that's not our nature. >> you can't. >> right. that's not our business. many times when there's uncertainty, that's when the best investments come up. you know, when everything is going like this and everybody has a clear vision of the future, that's probably the time not to invest. i think today, with the uncertainty around the world, it's a pretty good time.

quite frankly, we don't have an economic recession in the united states. we have a political recession. we have the inability of elected officials to sit together in a room and do the people's business. i think we all need to start acting like adults and doing the right thing for the future of our country. >> well, amen to that. let me ask you about your business. your bread and butter is private equity. you're putting money to work in various industries, including energy. this week, you launched two investment funds distributed by charles schwab. why the move? is this the sign of the times that private equity is becoming more of a traditional management company? >> no, i mean, when you look at the amount of capital in the hands of individual investors and the capital that's managed by registered investment advisers, in the united states alone it's $19 trillion.

>> wow. >> that's far greater than the amount of institutional capital. until recently, we didn't have the track record and expertise in the firm to create products that fit that market. the market basically wants liquidity and yield. we started a credit business in 2004. we now have a record to do that. so we now have products that fit that channel. it's a great place to find investors that want to be part of what we're capable of delivering. >> are you seeing the investor today risk adverse? are you seeing them hesitant in terms of putting money to work? >> oh, yes. not just corporations and pension funds but individuals. you talk to it people about what they want, they want some kind of yield and they want liquidity and safety. when you look at what happened after the election, the stock market went down 450 points.

but the bond market went up. so, you know, ten-year treasuries traded at 160. what does that mean? it means people don't want risk. they're dumping stocks and investing in u.s. treasuries. that's not a good thing for the u.s. economy when people become risk averse. >> absolutely. real quick on the dividend story. if dividends go much higher because of this fiscal cliff, you think that dictates people's behavior in will they stay away from dividend stocks? will companies report fewer dividends? >> well, i hope not. i mean, you know, when the people that -- if taxes go up, the people that get hurt are the people that are retiring, that have saved all their life to be in a position to do something else. i mean, if you're 55, 60 years old today and you had saved and done all the right things all your life and now you're getting 2% on your bonds and not much on your equity returns, you can't retire. you got to go back to work.

so a lot of this is hurting the very people that some of these policies are supposed to help. >> absolutely. very well put. george, nice to have you on the program. >> well, thank you, maria. >> we so appreciate it. george roberts is the co-founder and co-ceo of kkr. we're in the final stretch of trading for the day. the market under pressure once again with 35 minutes before the closing bell sounds. we have a dow jones industrial average down, bill. better than 160 points. >> i love george's line. we don't have an economic recession, we have a political recession right now. that's very, very well put. so listen, this was supposed to be a day of reckoning for facebook shareholders. more shares available out of the lockup for sale. so why do you reckon that shares are up 10% today? we're going to look at that issue coming up next. and then top business leaders meeting with president obama right now at the white house on solving the face call cliff. hon honeywell ceo will joining me first on cnbc as soon as that meeting is over. having you ship my gifts couldn't be easier.

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welcome back. facebook one of the big winners on wall street today. that's a surprise. this is a day when many feared a selloff because of lockup expiration of an additional 800 million shares available for insiders to sell. it hasn't happened. julia boorstin is here to explain what's going on. >> well, bill, facebook shares

are up 12.5% now as the stock benefits from a virtuous cycle. many late-stage investors whoing sell haven't because they bought in at higher prices than where the stock is trading now. the fact that they're holding on gives confidence to some institutional investors who were sitting on the sidelines. short sellers are losing interest as the stock gains momentum on optimism about mobile potential and accelerating ad growth. the number of shares borrowed to short is down 40% from earlier this month. maria. >> all right, julia. thank you so much. so is there more room to run for facebook? we're talking right now about the stock and this huge gain. >> yeah, rather surprising. rick summer of morning star is a bull on facebook. he says the company is just beginning to tap the potential max wolf takes the other side. he thinks many current investors may be waiting for the stock to go higher before selling and getting in now could be a sucker's play. thank you for joining us today.

max, what about this rally today when we expected more insiders to sell? what do you think is going to be here? >> it's a great number. we have to remember when we talk about facebook there's an unusual amount of private share trade activity. what you have is a lot of employees, a lot of people who bought at 28, 30, 32, $34. they're waiting for it to get stronger. we should keep in mind the company is doing some interesting things and usually does absolutely the best quarter in the fourth quarter. so it's probably not a time to really sell out. we also saw some weakness ahead of today as people got overly frightened about the lockup. last thing i'd add is in the past, facebook hasn't sold off immediately on the lockup. it sold off a few days later when prominent insiders decided to turn some of that promise they might get in the future for cash in their account today. >> i guess at end of the day, that's the question here. is this stock up because of fundamentals in the business, which would lead me to say, okay, maybe it continues higher, or is this just a technical reaction to the fact that

insiders are waiting for a chance to sell. it's still questionable why the stock is up when you have so much new stock on the market. >> rick, what do you think? >> a lot of times some of these things are self-fulfilling prophesies in the opposite way. we've seen a lot of new investors that have waited for today, thinking today is that day of reckoning. certainly we should see some new money become put to work. in a name like this, at a relative valuation level, facebook is one of the most attractively priced names on our coverage list. >> how much higher could it go? do you have a price target in mind? >> yeah, so right now we have a fair value of $32 on this. we're looking at about on a one-year return about a 40% a k affected return. we've only seen two ways they've unlocked. one is on mobile and sponsored stories. the other is around fbx, which

is their first initiative to really start to try and utilize data within the facebook walls and turn on some returns. there's a lot of additional revenue generation that hasn't turned on. quite frankly, we think this is a much longer term story. they have data. they have technology. they have reach. >> so how come the stock has lost so much of its value i understand the ipo then? >> the valuation was always an issue here. part of the lockup expiring reminds us of the valuation play. it's still $48 billion for a company with $5 billion in revenue. so the sale of the century, this most certainly isn't. part of what we're seeing is rotation out of the big three, out of amazon, apple, and google. some of the tech money is looking for a place. there's a decent number of people out there who like the upside to downside ratio in facebook. all that being said, mobile is important for them. we're yet to see them monetize outside. they have to do that to grow into any kind of valuation above of $26. we have another big problem in mobile here which is about 50%

of the click throughs where they're making their money turn out to be errors. they're accidents based on big fingers on small surfaces. >> facebook is still one of the top if not the top water cooler stocks to talk about in 2012. we just proved it once again. gentlemen, thank you for your opinions on that. >> thank you. >> thank you. >> as we head toward the close, we have about 30 minutes left. we're still hovering near the lows of the day. the dow down 150 points right now. >> meanwhile, there's also retail like best buy. best buy hoping price matching amazon during the holidays is key to the company's turn around. how much will that eat into the margins? we're talking with the ceo hubert joe lee. he'll join us next in his first tv interview since taking the job at best buy. what are his plans to save the company? that and more. in fact, he's here with me. also, president obama and house speaker boehner both laying out their demands for a fiscal cliff deal. now we have both sides on the

record. two top negotiators explain why side has the better cards to play right now and what their starting points say about the odds of getting a deal done. that should be interesting coming up. and then did you see this video of israel killing the top military commander of hamas? now they may be open warfare in that region. oil prices are spiking on this developing story. we'll take you live to the story. stay with us. try running four.ning a restaurant is hard,

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welcome back. live from chicago today. best buy, the world's largest consumer electronics retailer is undergoing a major overhaul. the company, which suffered a loss of more than $1 billion in its last fiscal year, is now under new leadership that is implementing a turn around plan. part of the strategy is price matching amazon. at least during the holidays, bill. >> that stock has reflected all of that, down about 40% in the last year. so how can the new ceo give investors and consumers reason to buy into his strategy?

we welcome him in his first cnbc and first television interview since you became ceo. welcome. >> thank you, bill. thank you. >> i mean, there are plenty of people who feel that best buy's better days are behind them. that technology, the way people buy, the way they shop these days has passed you by. you're not convinced yet. what's the strategy? >> i admired the company for a long time. i used to sell video games. i was sad to see how the company has lost ground in the last two or three years. yesterday we shared with the street our diagnosis. there's a significant gap between what i'm seeing and the actual reality of the strengths of best buy. best buy is an amazing company. we have great strengths. we're the market share leader. we have 40 million customers in our loyalty program. we've been gaining share in several of the important categories, in mobile phones and tablets. operating metrics are among the highest in the sector.

our performance the last two or three years has been sliding in a variety of ways. our margin has been declining. our share price has been down significantly, which is why we shared yesterday the key elements of our turn around plan for the company. it focuses on some basic elements. first, the customer. we need to reinvigorate and rejuvenate the customer experience. we need to put the petal to the metal on market share. we need to double it. reinvent the brand. good news is we also have significant operational improvement opportunities. >> mr. jolie, a little more of what you told the analysts yesterday. you set a goal of as much as 15% return in invested capital. you see an opportunity to boost annual operating income by more

than $1.6 billion with store improvements and cuts. tell us how you get there and what kind of expectation do you have going into the holidays for holiday 2012? >> well, we're pretty excited about the holidays. there's a ton of new products coming to market. you know, the apple products, windows 8, a lot of great releases. our sales associates are very ready to welcome customers. we're turning the table with price matching. we're ready for the holidays. medium-term, really convinced there's opportunities to make this company great again. that's why i'm here. we have a great team. we're billing a dream team. we'll go after these opportunities, both operational opportunities that are important. >> so you are mindful of this perception that's been out there for a few years that you've become a showroom for an amazon or other online retailers. people are so sensitive to price. they can come to you and see what's -- you know, touch and

feel. then they buy it where they can get it cheaper. won't that squeeze your margins? they're already pretty squeezed at this point to try and compete with that kind of perception. >> our margin of 4% is actually good for retailers. that's a strong basis. we love the fact that people come to our stores. we have 600 million visits to our physical stores in the u.s. every year. 1 billion visits to our website. once people are in our stores, we have our highly trained blue shirts who can provide knowledgeable and unbiased advice. what we've done is given the authority to our sales associates to match online prices. it's only 15%, actually, of people going to the stores with the intention of not buying in the store and buying online. we want to go after them. we're here to take care of them. we'll grow our online sales as well. there's no reason why we can't have a market share equivalent to a market share in the physical stores. >> mr. jolie, i think it's

interesting that you're offering to match online rival prices during the holidays. why not all the online rivals? just amazon. is this something that could happen by year round in terms of matching prices online? is this just for the holidays? >> it's not just amazon. actually, based on the media reports, you would have the feeling that amazon is a huge competitor in our space. our market share is much bigger than amazon in consumer electronics. it's all of the key online players that we're matching. after the holiday, we'll assess what we do. we wanted to be ready for the holidays. we invite all of our american customers to come to our stores and we'll do a good job for them. >> we're at an awkward phase. let me ask you something off topic. a number of sex-related scandals have been in the news. you came to your job in that way with your predecessor getting caught up in that and the

founder and chairman having to leave. are we at a point where we're overdoing it? is it right that somebody just automatically has to leave the job before it's even been proven? can humans no longer run a company? what's your view of that? >> i'm not going to comment on the individual cases, but as leaders, leadership has a number of components. one is ethics and integrity. it's not surprising that we be held to very high standards. as leaders, we're the spokespeople for our companies. we have to be a model. we have to inspire. the standards are pretty high. that's the reality now. at the same time, we're all human beings. nobody is perfect. ethics and integrity, these are fundamental values. >> well put. good to see you. >> thank you. >> have a happy holiday. the ceo of best buy. maria, the selling -- >> all right. >> still going lower.

>> yeah, we're in the final stretch here. we got a market down 165 points. we're at the lows of the day with just 15 minutes to go before the closing bell sounds. >> as it stands now, the dow is down roughly 5% since election day. one of our next guests still has a lot of faith in this market. does that mean she has faith in the fiscal cliff being resolved? her surprisingly optimistic outlook is coming up next. and after the bell, is the looming fiscal cliff creating an investor crisis of conference? >> walt bettinger is with me. we'll hear from individual investors and his side of the story.

welcome back. the selling intensifies at this hour. the president's news conference, you saw it here live on cnbc, as he sort of dug in his heels, making it clear he still intends to increase the taxes on the upper 2% income in the united states as well as to look for closing various loopholes. it's becoming clear that the two sides before they even come together are still rather far apart. we'll get to that in a moment. meantime, starbucks has made a big move into the tea market. seema mody is here with details.

>> we have a lot brewing over here. starbucks announced it is buying teavana for a price of approximately $620 million. shares of teavana were halted. since then, we have reopened and we're up sharply on the day, better than 50%. aside from that, cisco a big winner in today's down market on its strong earnings report, thanks to its tighter cost-cutting controls. we're seeing the stock up on the day. back to you. >> all right, seema. thank you so much. tough day for the stock market, for sure, with this market worsening as we speak. the fed minutes today out outlining a less than rosy picture for the economy in terms of doing underperformer. that's added to the acceleration of the selling. >> however, danny hughes from devine capital is still optimistic about the market. she joins us as well as our own bob posafni.

it's still early in the negotiation process, obviously, but it is pretty clear that the two sides, even though they were talking compromise last week r still beginning from very far apart. >> yeah, well, i can't imagine with would expect the day after an election we would, you know, immediately be off the cliff. overall, the market performance since, you know, the beginning of october hasn't been that surprising given the september surge. if you roll back the clock, the s&p was up for the year. now it's not. we've given back are 45% of our gains in 45 days. that's not a good sign at all. i think people are very concerned about what's going to happen with respect to taxes, plus the concern about lower and slower growth. advisers are saying, let's sell now and worry about it next year when we know what's going to happen. they want to avoid big surprises. >> but you feel that's a buying opportunity when you get this kind of a selloff. well, it's a buying opportunity for certain types of companies,

i think. we look at efficiency as being a big driver for what's happening in the marketplace. we love companies that are paying dividends as well. so those are two of the big screens we look at. we think there are some absolute opportunities out there, especially on a day like today. >> so bob, where are you seeing the selling right now? we have a market at the lows. are we seeing the low-hanging fruit, the winners that have been the leadership in this market in 2012 the biggest sales right now? >> first of all, the biggest decliners are transports, which would be related to the u.s. economy. second is financials. after that, it's pretty much the big global, industrial, and material stocks that are do the downside. we have lost 1100 points in the do dow in the last three weeks. that's a drop of a little more than 8% since we hit the high. i think that was the first week of october. right now the dow is only up 3% on the year. we've had a lot of damage in

tech and the big global industrials. it all started when the president simply dug in his heels on the idea of raising tack rates for the wealthy. he specifically said raising tax rates will not break the backs of the wealthy. that was a quote widely distributed on trading desks. >> that certainly was the leadership on this acceleration. >> so what will grow this economy then? you know, there's a feeling that it doesn't matter what's in this compromise to fix the fiscal cliff as long as they get past it and this economy can grow again and the markets go higher again. is that naive? >> i don't think so at all. we're going to see some stabilization in 2013, probably after the first quarter. i definitely think thatstabiliz. we have the increase in oil supply as well. from a macro perspective in china, we're going to have a changing of the guard. we think we'll see activity out of china, probably into the first quarter of next year. i think that will help the

global economy and make people feel there's more growth to be had, that things will calm down. whenever there's uncertainty of any kind, we're going to see this kind of activity. >> and we're getting that today. >> the bulls are saying if we resolve the fiscal cliff by the second week of december, we're going to get a heck of a rally. i think that depends on what the resolution entails. >> sure doesn't feel like it with the way we're hearing the rhetoric so far. thanks. as we head toward the close, mar maria, the dow still near the lows of the session. down 185 points right now on the industrial average. >> meanwhile, there's another major story brewing. hamas, the terrorist group, says the gates of hell have been opened after an israeli air strike killed the head of its military. will this spark an all-out war? >> it certainly sparked a spike in oil. that's for sure. we'll look at a full report on that coming up. get you caught up on that after this.

. gaza is on fire this hour after israel killed hamas' top military commander earlier in an air strike. martin fletcher is in telaviv

with the latest details. >> reporter: hi, what an explosion here. the israelis launch an attack from an arab plane, a rocket attack on a car driving. they killed the military leader of hamas. he was top of israel's most wanted list for years. he'd bp responsible for killing many israelis. the israelis say this is the beginning of a major offensive against islamic militant leaders in gaza. after five days of taking 100 rocket attacks, israelis said enough. now they've launched this revenge attack. they say there will be more attacks. israeli leaders have said that they will consider expanding the operation. it could be a ground offensive even. meanwhile, the egyptian government has recalled their ambassador from israel. the israeli ambassador will be leaving egypt within a few hours. this attack in gaza is becoming an international event, which

could threaten to make the region even more volatile. >> martin fletcher, thank you very much. maria. >> well, the attack having a major impact on the oil market today. we're watching prices move up. bertha coombs is here with that angle. over to you. what can you tell us? >> as those headlines cross, and in particular the headlines coming from israel that this was the beginning of a prolonged effort to combat hamas. that is what september oil spiking up 1% on a day when after poor retail sales, we really were seeing not much movement at all. traders are saying this definitely puts the geo political risk on the table as martin describes. the fact this could spread and cause more destabilization in the area. what they look for as well, this is not an oil producing area. this could spread. what it means if israel is willing to act so forcefully with regard to israel, perhaps, and iran. that is the big picture and what

would really send oil prices much higher. meantime, tomorrow morning we'll be getting the inventory number on both crude and gas. we are expecting to see the first draw down of the season. back to you. >> all right, bertha. thau thank you. one of those rare days where energy and equity are going in opposite directions. we'll get into that coming up. well, we're looking at a sharp selloff here. better than 200 points now on the dow jones industrial avrm. down 207 points as a president obama meeting with top ceos right now as we speak at white house ahead of meetings on the fiscal cliff with congressional leaders. we're watching these meetings and navigating and monitoring for you. up next, i will talk with the honeywell ceo as soon as he comes out of that meeting. we'll find out if, in fact, compromise was discussed. find out if he thinks a fiscal cliff compromise can be reached. gecko (clearing throat)

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or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade. 90 seconds left. we're going to finish on the lows of the day. there's the dow down 200 points. a decline of 1.5%. the selling has intensified here since the president's news conference. ben willis, is it possible we're

heading back to the volatility we saw in the summer of '11 during the contentious negotiations over the debt ceiling at that time? >> is it possible? yes. i don't think that's the case. i think if you haven't sold, this is your opportunity to be buying. i think the worst -- >> you're ready to buy? >> absolutely. i think we're at the low end of a correction that's been in place since september. it happens to coincide with the fiscal cliff and the election. the fact of the matter is, if i haven't sold them, i would now. >> i would agree. any time you see this kind of a massive selloff, the next couple of days people are starting to buy the stocks that are really quality companies. i think you're going to continue to see that. tomorrow's probably a good day. >> we're down 189. >> i moved the market. >> i think it's safe to say volatility is here to stay until we get a resolution. >> if you bought the vix as protection in late september, you're up 20% on your investment on that henl. so not a bad trade. >> thank you, both, for joining us toda